China's imports of many major commodities all but dried up in February as a national holiday, abundant stockpiles and rising prices combined to discourage shipments, data from China's Customs office showed on Monday.
Chinese demand is the motor of many world commodity markets, but this year prices have been driven more by supply disruptions around the world, while China's tighter monetary policy and a crackdown on speculators has reined in bullish buying.
Two of the commodity imports that slowed fastest in February were iron ore and coking coal, the raw materials used by China's vast army of steelmakers.
February's imports of iron ore came in at 48.8 million tonnes, falling back sharply from the previous month, when a rush to fill orders before the week-long Lunar New Year helped push volumes to a monthly record of 69 million tonnes.
A 7 million tonne bulge in iron ore stocks at China's ports so far this year, coupled with a cautious turn in steel prices set by leading Chinese mills, point to weakening demand for steel in the world's top steel market.
Coking coal imports collapsed by almost two-thirds in February, falling below 2 million tonnes for the first month since May 2009 as the impact of Australia's disastrous floods choked supplies and pushed up global prices.
Overall shipments of coal to China, including supplies for power production as well as steelmaking, fell to 6.8 million tonnes, with each of the top three suppliers -- Indonesia, Australia and Vietnam -- seeing trading volumes down by half from February 2010.
China's mild winter helped subdue demand for coal and other forms of energy in the first two months of the year, although a drought in wheat-growing areas prompted an emergency irrigation campaign that added to demand for diesel, used to generate pumps.
China's drought helped open the door to 115,864 tonnes of Australian wheat, likely degraded by flood damage and useful in China's tight market for animal feed.
Crude up, metals down
Although the extra diesel demand helped increase China's overall apparent consumption of oil by 10.2% from February 2010, the rise in demand owed something to stockpiling of diesel, with a 28% leap in reserves of the fuel as the government capped exports.
Imports of liquefied natural gas fell to the lowest in nine months. But a surge in pipeline gas from Turkmenistan, which came on stream a year ago, provided the same amount -- 660,000 tonnes -- boosting access to the clean-burning fossil fuel, which is expanding its share of the Chinese market from a small base.
Bucking the overall trend of slowing imports, crude oil shipments grew to the third-highest level ever in February, with Iran, Sudan and Venezuela all seeing big year-on-year increases in the volume shipped to China.
Russian crude oil volumes, at 1.6 million tonnes, almost doubled from January as the new ESPO pipeline began to hit its stride. But Russian oil supplies in the first two months of the year were still down by 18% from a year previously after oil supplies switched to the pipeline, deserting the more expensive railway route used in the past.
Chinese buying of base metals also hit the buffers in February, with imports of refined copper tumbling 36% to a 27-month low as the trade finally succumbed to economics.
The window for profitable shipments to China has been shut for months, but the momentum of annual supply contracts had helped keep the metal flowing into China nevertheless.
Traders estimate bonded stocks of copper, which have arrived but not yet paid value-added tax, have doubled to more than 600,000 tonnes since early December.
That pile of unconsummated imports casts a massive shadow over the world's biggest market for the metal, since it accounts for roughly 50% more than China's own monthly production of the metal.
February net imports of primary aluminium and refined zinc virtually halved from January, although burgeoning Chinese production implied an overall increase in demand.